ECONOMICS: Focus on the downside

Guns are a big part of my life… they make me money, they keep me safe, they encourage a particular set of values and lifestyle….but sometimes it gets difficult to remember that there are other aspects of preparedness that may actually be more paramount.

Source: Focus

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If someone asked me what to do to increase resilience for 2021 I’d say “Wargame a scenario where you lose your job and can’t find another one at all or at the same wage and prepare for that”. That means clear debts as quick as you can, and start holding cash. Sure, you’ll lose some to inflation but I don’t see a Wewimar-esque hyperinflation coming yet. If you want to hedge your bets, split it among cash and metals. Here’s what I wold not do: I would not buy big ticket items just because I can, I would not buy anything on credit, I would not plan any expensive vacations, and I would not plan on having kids (because do you really want to take the hit of three months without a paycheck  and have the added medical expenses and the additional stresses all at a time when things are so uncertain?)

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Yeah, it’s easy to be an optimist, and if you’re lucky, it’ll always work out for you.

But when planning for contingencies, assume the worst, and all surprises will be to the up side.

When as the Big Fat Old Turkey couselling Fat Old White Men, who were laid off or fearing for “their” job — even though “your job” is really NOT yours — I would urge them to figure out their “burn rate” of mandatory monthly expenses and depending upon their situation of age, education, savings, debts, and skills — hot in great demand or not — then realistically plan for how long they would be out of work.

Sometimes the answer was that they’d never get another job like their last one. It’s a brutal honest truth that comes to all of us sooner or later. (In my case, it was later; I’ve see some who just turned 50 and were stunned to be unable to find work at all.)

So a word to the wise, be prepared.  In this economy, an emergency fund of two years burn rate is NOT out of the question.

AND, YOU MIGHT NEED MORE.

YMMV.

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